Modi government planning a major overhaul of country’s drug policy

Government is also looking to arrest further loss of business to China that has gobbled up India’s share of active pharmaceutical ingredients (APIs) and intermediates.Yogima Seth Sharma | ET Bureau | Updated: October 04, 2016, 11:10 IST

NEW DELHI: The government is planning a major overhaul of the country’s drug policy that includes reducing the number of drugs under price control, doing away with the practice of periodic renewal of manufacturing licences, and making it easy to do medical and drug research in the country.

The initiative is being backed by the Prime Minister’s Office (PMO), which wants India to emerge as a major hub both for manufacturing pharmaceuticals as well as innovation in medical research, a senior government official told ET.

The government is also looking to arrest further loss of business to China that has gobbled up India’s share of active pharmaceutical ingredients (APIs) and intermediates.

Need to smoothen hurdlesThe PMO had called a meeting recently to discuss the country’s pharmaceutical policy and future strategy. The meeting was attended by officials from the health and pharma ministries as well as from Niti Aayog.

Niti Aayog Chief Executive Officer Amitabh Kant has written to the health ministry, asking it to examine and scrap all regulatory hurdles.

Also on cards is a review of the price control regime, under which the drug pricing authority fixes prices of certain medicines. Over 750 formulations are currently in the National List of Essential Medicines (NLEM).

A decision on the new policy framework is expected shortly, said the senior official quoted earlier. “These are simplifications the government is attempting through a neutral institution like Niti Aayog because health ministry and others would not like to surrender their power,” said Dilip Shah, secretary-general of Indian Pharmaceutical Association, the industry body that represents domestic drug makers.

Price controlThe official said Niti Aayog was of the view that the drug price control regime needed to be reviewed as it was discouraging investments in the sector.

Moreover, it should not be mandatory for the National Pharmaceutical Pricing Authority (NPPA), the drug pricing agency, to control or administer prices of all the drugs under the essential commodity list.

The Aayog felt that even if a drug was deemed essential, it was possible in many cases to arrive at negotiated cheaper prices with the industry instead of setting prices by diktat, citing the case of coronary stents that were recently included in NLEM.

“The drug controller operates the essential drugs list which is approved by the health ministry without much application of mind. Moreover, once a commodity is included in that list, NPPA starts controlling its prices. Even if it is an essential commodity, NPPA does not have to impose price controls,” the official said.

LicensingThe government is also keen to relax licensing conditions to encourage investments.

One of the issues under deliberation is the need for periodic renewal of licences, which creates an ‘Inspector Raj’ regime for the industry. “Once a licence is granted, it should remain valid unless suspended or cancelled,” the official said.

The process of granting approvals for drug and medical devices research will also be reviewed.

Citing the example of Singapore, where any application for medical research gets an approval within 30 days, the official said in India there are several committees whose permission is needed to kickstart the process of innovation in medical research.

This process needs to be streamlined and shortened, added the official.

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